5 Steps To Take Before You Prepare Your Taxes

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5 Steps To Take Before You Prepare Your Taxes

How to Prepare Your Taxes

According to reports of the Internal Revenue Service (IRS), approximately 85 million of taxpayers hire professionals to complete, revise, and submit their tax returns.

So whether you wish to rely on yourself to file your taxes, or wish to be more aware about the questions that your preparer asks you, these 5 crucial pre-filing steps will make the tax return process easy, fast, and organized.

  1. Choosing the Right Preparer for You

If you are new to tax filing, a good decision is to hire a tax preparer, and getting referrals through reliable sources like friends or legal advisors is recommended. Make sure that your chosen preparer has a PTIN or Preparer Tax Identification Number, which denotes authorization to prepare federal income tax returns. 

Enquire about their fee charges, keeping in mind the intricacy of your return. Don’t entangle with a company that has a clause of taking a percentage of your refund. Checkout the IRS website for tips on choosing a preparer. They also have a link to the IRS directory of preparers, to search by credentials and location.

  • Schedule an Early Appointment

Meet with your preparer as soon as you can, so that you can complete your return early, regardless of deciding to file for an extension. You will receive anticipated returns sooner too.

Waiting too long to schedule appointments might lead to missing the deadline for filing. This will cost you opportunities to lower tax bills, through deductibles such as health savings account (HSA) or individual retirement account (IRA).

  • Gather Required Documents and Receipts

Gather all essential documents regarding your tax returns from your employer(s), brokerage firms, banks, and more, who are involved with your professional business by the end of January month. Ensure that each form has information matching your own records.

Common forms include, Form W-2 for your job, all 1099 forms reporting sources of income, Form 1098 for mortgage interests paid, Form W-2G for gamble winnings, etc.

The receipts you require will depend on your decision to claim standard deduction or itemize your deductions. You would want to choose the option that produces greater write-off. The way to know that is to add your itemized deductions and compare it to results of standard deduction.

  • Mention Your Personal Information

Make sure to jot down all important personal information in a safe place that your tax preparer would need, such as the Social Security number (SSN) of you and each dependent you claim.

Note addresses of additional properties such as vacation homes  or rentals. In case of property transactions of last year, mention the dates of buying and selling, amount paid for it originally, and amount received post-sale.

  • Plan Ahead For Filing Extension or Refunds

In case you require more time for completing these tasks, you also have the provision to ask for an extension till October 15th to complete your tax filing. However, you would need to send an estimate of the amount of tax you owe and pay it up by the regular deadline of April, to not risk interest or penalties.

If you anticipate a tax refund, you can handle it in different ways- either you apply to some or total refund toward following year’s taxes, it would help cover the first quarter installment of your annual taxes; or you can ask for a mailed paper check or direct deposit to your account by the government.

You can also contribute part of the refund to different types of accounts (IRAs, savings accounts for health, education, and more), buy U.S. savings bonds using TreasuryDirect, or complete the Form 8888 to split your refund amongst the direct deposit choices.

Make sure to inform your tax preparer so they indicate it on your return.

Bonus Tip: Keep A Copy of Last Year’s Return

In case you are using the same preparer as last year, your previous information will already be with them. For new preparers, it will remind them and you of important items to not overlook, such as Interest and Dividends, Charitable deductions, etc.


Whether you plan to file taxes yourself or hire a professional for the task, organizing the records prior time will save both time and money. For a smooth process, make sure to start early. You can check out the IRS’s list of “steps you can take now to make tax filing easier in 2023.”

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